Insolvency resolution ecosystem is not ready yet, says SBI's Arundhati Bhattacharya

KOLKATA: State Bank of India, the country's largest lender, said it doesn't want to rush in taking loan defaulters to the insolvency resolution courts as it believes that the resolution ecosystem is not ready yet.

The Insolvency and Bankruptcy Board of India (IBBI) has listed 115 cases so far where the National Company Law Tribunal ordered corporate resolution against sick units, but experts say that the gaps in the system needs to be plugged to get results.

SBI Chairman Arundhati Bhattacharya underscored the need of building ecosystem with well-trained resolution professional and setting up of information utilities so the court will not have to go from one place to another for information.

"We had asked for insolvency resolution law and we have got it. But we can't have a makeshift structure," Bhattacharya said in Kolkata.

IBBI was formed on October 1, last year in accordance with the provisions of The Insolvency and Bankruptcy Code.

While it has listed over 100 cases of insolvency resolution action, some debtors move courts to stall proceedings. Recently, The Gujarat High Court stayed further hearings on the insolvency petition filed by Standard Chartered against Essar Steel in the Gujarat Bench of the NCLT.

"We are not rushing. The ecosystem needs to be created first. It will take some time," Bhattacharya said, after inaugurating SBI's wealth Management Services in Kolkata.